Student Loan Debt

JPMorgan’s Jamie Dimon: Student lending in the U.S. is a ‘disgrace’ and it’s ‘hurting America’

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June 28, 2019

By Julia La Roche

For Yahoo Finance

JPMorgan Chase (JPM) CEO Jamie Dimon says student lending in the U.S. has been “a disgrace” and it’s “hurting America.”

“Is there an issue with student debt? There is, but you’ve got to stop the creation of bad debt,” Dimon told Yahoo Finance’s Andy Serwer in an exclusive interview at the unveiling of JPMorgan’s new flagship bank branch in Midtown Manhattan.

Dimon added that the government has “irresponsibly” lent more than $1 trillion since taking over in 2010.

“And now they want to forgive it,” he said.

Student loan debt has soared over the last decade. (Graphic: David Foster/Yahoo Finance)

 

Student loan forgiveness has become a focal point of the 2020 election, with Democratic contenders rolling out plans. This week, Sen. Bernie Sanders (I-VT) unveiled a sweeping cancellation plan that proposed taxing financial transactions.

“I think they should look at all parts of student lending, fix the broken parts, and then forgive those people need forgiveness, and then help people get into school, and then make sure the schools are responsible in getting the kids out,” Dimon said. “And what we’ve done is a disgrace, and it’s hurting America.”

He pointed out that a tax on financial transactions would be paid by investors.

“How they go about taxing, I’ll leave that to the politicians to figure that out,” he said.

To read more, click the following link:

https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-calls-student-loans-a-disgrace-171749043.html

The Givling trivia app claims to help people with student debt. Players say it’s expensive and risky

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June 26, 2017

By Annie Nova

For CNBC

ABRA BELKE WAS IN LAW SCHOOL when she came across the Givling app, which calls itself “the world’s most incredible trivia game.” It promised winners payments toward their student debt.

Belke was interested. Her student loan balance was more than $100,000 and she had previously won $62,000 on the syndicated game show, “Who Wants To Be A Millionaire.”

“I’m a trivia buff,” Belke, 37, said.

However, she quickly realized it isn’t knowledge on a variety of topics that makes a player competitive on Givling. It’s money.

H/O: The Givling app
Caption/Credit: The Givling app

The app’s most-coveted $50,000 payout is awarded every seven to 10 days to players who reach first place in the game’s queue, which currently has more than 450,000 people, according to the company. To climb in that ranking, players need to accumulate queue points. That can be done by watching ads on the app, buying Givling merchandise or coins and using its paid sponsors, which include Uber Eats and eyewear maker Warby Parker.

Belke did it all. She rose up in the queue and hovered in the top few spots.

To Read more click on the link below:

https://www.cnbc.com/2019/06/21/givling-trivia-app-offers-student-debt-payouts-players-say-its-risky.html

Your Credit Score & Student Loans: $67,916.64 Paid, $17,391.43 Till Payoff

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Here… Take My Money, All of it.

The financial burden of student loans on the lives of young professionals is well documented.   I’ve been on my personal repayment journey for eight years now.

I have been fortunate to have had the ability to make timely payments throughout, and this has improved my credit score substantially.

However, this wasn’t always the story.  Six months after graduation, my mailbox was stuffed full of payment due notices.  The letters came from ACS, Nelnet, FedLoan, and Brazos.

I requested electronic notifications, and began making payments every month.  It didn’t take long to get a letter of 30 days delinquency from a new company-University Accounting Services (UAS).  I was infuriated, I thought everything was taken care of.

What. In. The. World. Was. Going. On???   

I overlooked notices from UAS under the mountain of loan servicer paperwork.  I threw up my hands and wanted to give up already.  Out of curiosity I checked my credit score and sure enough, UAS tacked on a “missed payment” notification onto my credit report.

Thankfully, I was able to get the servicer’s contact information.  To my surprise, UAS was collecting the debt on behalf of my alma mater Abilene Christian University.  I own my mistake of falling behind on the student loan payment.  ACU regularly makes donation calls, a courtesy call regarding this debt would’ve been awesome. HaHa.  Well… as I said before, this was my mistake not ACU’s. I’m STILL a little salty to this day.

 

So Here’s What I’ve Learned

  1. Sort and organize mail from student loan servicers.
  2. Check your credit report regularly.
  3. Don’t be so hard on yourself, we aren’t perfect.

Below is an update on my student loan debt.  Until next time everyone, stay strong, fight on, and have no debt but love! Peace and blessings.

In the News: Lawsuit alleges the government is illegally garnishing tax refunds of student-loan borrower

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June 20, 2019

By Jillian Berman

For MarketWatch

For the past few years, the government has been taking pains to collect on Tamara Blanchette’s student loans — garnishing some of the money she receives through her tax refund.

But it’s debt the government shouldn’t be collecting on in the first place, a new lawsuit alleges.

The suit, filed on behalf of Blanchette and similarly situated borrowers, alleges that Betsy DeVos and the Department of Education are collecting on debt that isn’t legally enforceable.

That’s because the Department knows that Blanchette and other students who enrolled in the criminal-justice program at the Minnesota School of Business, a now defunct for-profit college chain, were defrauded by the school when they signed up for the program, according to court documents.

For more information click on link below:

https://www.marketwatch.com/story/lawsuit-alleges-the-government-is-illegally-garnishing-tax-refunds-of-student-loan-borrowers-2019-06-19

In The News: To Begin Solving Student Debt, the Education Department Must Factor In Race and Ethnicity

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June 18, 2019

By Victoria Yuen

Center for American Progress

 

In fall 2017, the U.S. Department of Education released shocking findings about the long-term outcomes of student borrowers of color, particularly those who are black or African American. The data showed that the average black or African American borrower who entered college in the 2003-04 academic year had made no progress paying down their debt by 2015; in fact, they owed more than they originally borrowed. Even worse, nearly half of black or African American student borrowers had defaulted on their loans within the 12-year time period. These findings revealed a repayment crisis for black borrowers and raised serious questions about how the American higher education system serves all communities of color.

But the data have not yet led to any major plans in Congress to improve the outcomes of student borrowers of color. Just last month, for example, front-page headlines trumpeted a wealthy financier’s pledge to pay the student loan debt of an entire graduating class at historically black Morehouse College, demonstrating anew how much student debt is still weighing down African American borrowers—and why these students need systemic solutions.

Click on the link below to read more:

https://www.americanprogress.org/issues/education-postsecondary/news/2019/06/18/470750/begin-solving-student-debt-education-department-must-factor-race-ethnicity/

In the News: Battle Lines Drawn on a Student Loan Alternative

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June 13, 2019

By: Andrew Kreighbaum

Inside Higher Ed

Senator Elizabeth Warren and other congressional Democrats delivered a warning on Tuesday about the potential dangers of income-share agreements, an alternative form of college financing increasingly popular with some critics of student loans. The lawmakers’ primary target was the Trump administration — which has expressed interest in experimenting with the agreements — but the shot across the bow also aimed at colleges operating their own ISA plans.

Income-share agreements offer students financial support up front and in exchange require them to repay a portion of their income for a set number of years. They first caught on at coding boot camps and similar programs that don’t receive federal student aid. But a handful of four-year colleges have begun offering their own ISA plans and, last month, the Trump administration said it planned to pursue a federal experiment to offer income-share agreements to students.

Click link below to read more:

https://www.insidehighered.com/news/2019/06/05/democrats-take-aim-student-loan-alternative-and-colleges-offer-income-share

 

In The News: At HBCUs, crushing student loan debt is a symptom of even bigger problems

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June 11, 2019

By Dartunorro Clark

MSNBC News

When Michael Sorrell became president of Paul Quinn College 12 years ago, he assessed the dire situation his school was in and made a bold choice: No more football.

“I mean, we’re in Texas. We’re an HBCU in Texas,” Sorrell said. “I got a little flak for that, OK?”

But to him, eliminating the program was the only way the historically black college in Dallas, which was founded in 1872 by a group of preachers from the African Methodist Episcopal Church to educate freed slaves and their children, could get back on track.

Football had cost the school roughly $600,000 to $1 million a year, he said, and scholarships went mainly to the players. Meanwhile, other students struggled, faculty and staff members were leaving, and buildings had fallen into disrepair.

“We were roughly 18 months to 24 months away from closing. We had financial problems. We had academic problems. We had morale problems, and it was the prototypical scenario for an institution that had been struggling for a long time and the end of the road was coming,” he told NBC News in a phone interview.

The challenges Paul Quinn College faced are not unique, experts said, even if its solution was one of a kind.

Click link below to read more:

https://www.nbcnews.com/politics/politics-news/hbcus-crushing-student-loan-debt-symptom-even-bigger-problems-n1014171

 

In the News: Education company Chegg is helping pay down its employees’ student loan debt. ‘They are creating value for us’

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June 7, 2019

— CNBC’s Annie Nova contributed to this report.

https://www.cnbc.com/amp/2019/06/06/chegg-is-helping-pay-down-its-employees-student-loan-debt.html

Chegg has a new plan to help its employees deal with their student loans.

And its CEO wants other companies to follow Chegg’s lead.

The student-connected learning platform announced a new program Thursday that will give its entry- through manager-level workers up to $5,000 a year, if they have been with the company at least two years. Director- or vice president-level employees can get up to $3,000 annually to help pay down their student loan debt.

“Corporations need to play a role here,” Chegg CEO Dan Rosensweig told CNBC’s “Closing Bell” on Thursday.

“We are the beneficiaries of those people who have gotten an education — doesn’t matter if it is four year or two year or even if they completed it,” he added. “If they borrowed money and they are creating value for us, we want to help them.”

Student loan debt has hit record levels, with borrowers owing a total of $1.5 trillion. About 7 in 10 college graduates have education debt.

“We are taking our most vulnerable, least financially stable and we’re creating a burden on them that is unsustainable.” -Dan Rosensweig, Chegg CEO

Many also are unable to find ways to pay their bills. More than 1 million borrowers go into default each year. By 2023, its projected that 40% of borrowers may default on their student loans.

Chegg’s latest benefit is in addition to the $1,000 cash that its employees with student debt already receive each year. To pay for the program, called Equity for Education, Chegg created an equity pool from its existing stock.

“We’ve got a mess and it’s probably the biggest economic crisis facing this country. And we don’t deal enough with it,” Rosensweig said.

The Santa Clara, California-based company certainly isn’t the only business helping workers with some sort of student loan debt assistance.

Student loan debt

Getty Images

Last year, Fidelity began to offer companies a way to contribute to their employees’ education debt with its Student Debt Employer Contribution program. It now has more than 65 companies that are offering, or in the process of offering, the benefit.

“A growing number of companies are increasingly aware that helping their employees take on the issue of student debt can help improve their overall financial wellness, which can in turn have a positive impact from a business perspective in a host of ways,” said Asha Srikantiah, head of Fidelity’s Student Debt Employer Contribution.

In fact, Fidelity has already seen an improvement in attracting and keeping top talent since it started offering the program to its own employees in 2016.

“For eligible Fidelity employees from 2016-2018, we’ve seen an approximate 75% reduction in turnover in the first year of program participation,” Srikantiah said. “And, according to a recent internal survey, it’s among the top two reasons people decided to join Fidelity.”

Still, the companies that offer this type of benefit remain the minority. About 4% did so in 2018, according to the Society for Human Resource Management.

Chegg’s CEO said his company thought long and hard about how to come up with a program that other companies can copy.

“We wanted to see if we could set an example and create a dialogue,” Rosensweig said.

He’s also hoping the government and colleges take notice of Chegg’s plan and do their part to help with the crisis.

“We are taking our most vulnerable, least financially stable and we’re creating a burden on them that is unsustainable,” Rosensweig said.

 

In The News: The average millennial has a net worth of $8,000. That’s far less than previous generations.

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June 5, 2019
By Abha Bhattarai for Washington Post

Millennials are doing far worse financially than generations before them, with student loans, rising rents and higher health-care costs pushing the average net worth below $8,000, a new study shows.

The net worth of Americans aged 18 to 35 has dropped 34 percent since 1996, according to research released Thursday by Deloitte, the accounting and professional services giant. This demographic is paying more for education and such basics as food and transportation while incomes have largely flatlined.

“The vast majority of consumers are under tremendous financial pressure,” said Kasey M. Lobaugh, Deloitte’s chief retail innovation officer and lead author of the study. “That is particularly true for low-income Americans and millennials.”

The growing gap between the nation’s wealthiest residents and everybody else, he said, is affecting the way consumers spend…

Click link below to read more:

https://www.washingtonpost.com/business/2019/05/31/millennials-have-an-average-net-worth-thats-significantly-less-than-previous-generations/?noredirect=on&utm_term=.269c9363005d